Recovering Opportunity

Racial barriers continue to hold back millions of Americans -- and our economy.

When he signed the American Recovery and Reinvestment Act of 2009 (ARRA) -- the economic stimulus package -- President Barack Obama promised it would "begin the process of restoring the economy and making America a stronger and more prosperous nation." The act invests some $787 billion in unemployment assistance, tax cuts, support to cash-strapped state governments, job creation, job training, education, and infrastructure.

Less noticed but just as important is the act's commitment to securing more equitable opportunity for all Americans. In its text and in its implementation, the act holds the potential for a transformative shift toward greater equity in our economy. But fulfilling the potential of this little-noticed mission of equal opportunity will require vigilance, activism, and innovation.

With an African American president, it is tempting to think that racial and ethnic barriers to opportunity are largely a thing of the past. More prominent in progressive circles is the idea that modern racial inequality flows almost entirely from class inequality, and therefore class-based fixes will inevitably advance racial equity. Unfortunately, research and experience prove otherwise. While we've made significant progress in our country when it comes to race relations, racial barriers to opportunity continue to hold back millions of Americans and, in so doing, hurt our economy.

Consider, for example, the exploitative sub-prime lending practices at the heart of today's economic crisis. Federal data show that African Americans and Latinos were more likely to be marketed high-interest, sub-prime loans than were similarly qualified whites, irrespective of their income. Indeed, the racial gap in sub-prime lending was greatest among higher-income borrowers. This problem has both historical and contemporary causes -- from redlining and forced segregation in the past, to the paucity of banks in minority communities and discriminatory, predatory lending practices that continue today.

Similarly, research shows that people of color still face subtle but persistent bias in job selection. Resumés with "white sounding" names like Brad and Cindy, studies show, receive more callbacks from employers than do identical resumés with "black sounding" names like Jamal and Lakisha. Whether this discrimination springs from intentional bias or subconscious stereotypes, it's clear that these practices combine with systemic barriers like under-resourced schools, inadequate public transportation, and a dearth of health-care facilities in communities of color to diminish opportunity based on race.

Other systemic factors place particular racial and ethnic groups in a disadvantaged posture that warrants a more particularized approach. Federal mismanagement of American Indian trust funds, for example, has cost the native population billions of dollars. American Indian tribes also hold a sovereign status commensurate with the 50 states under our Constitution but have seen that sovereignty persistently ignored and eroded, with devastating economic consequences. In 2007, American Indians were three times as likely as whites to live in poverty. And unemployment rates on some reservations top 80 percent.

For these and other reasons, even the socioeconomic improvements of the boom years do not reliably translate to more equitable opportunity. According to the Bureau of Labor Statistics, in May 2007, before the current economic downturn, the unemployment rate was 3.9 percent for whites, 5.8 percent for Latinos, and 8.5 percent for African Americans. All three figures roughly doubled over the next two years, but the racial gap remained about the same. The pre-recession economy also included stark racial inequality in wages and assets. In 2007, African Americans earned only 75 cents for every dollar earned by whites, and Latinos earned only 73 cents. Families of color held just 15 cents of "wealth" (assets minus debt) for every dollar held by white families, making it profoundly more difficult for them to survive a downturn without becoming further mired in debt.

Because we are all part of an interconnected economy, the need to address these gaps in opportunity is an economic as well as a moral imperative. The United States cannot stage a full or lasting recovery without addressing these gaps. Moreover, if the American Recovery and Reinvestment Act merely restores the economy to the inadequate and unequal conditions of 2007, the nation will remain on a long-term path toward sustained economic insecurity.

How can ARRA catalyze a period of greater and more equitable opportunity? The seeds are there, but they need cultivation and care.

First, a number of provisions in ARRA invest in initiatives that have proved over the years to serve all Americans while offering communities of color more access and opportunity. For example, the act invests in improving and expanding community health centers across the country. These centers are known for providing quality care to diverse and low-income communities, addressing cultural and language differences, and controlling costs. A robust system of community health centers in inner cities and rural areas can create jobs, improve health and productivity, and lower the daunting cost of care for diverse communities. Similarly, ARRA's $2 billion to expand Head Start and Early Head Start programs supports an initiative with a track record of serving all kids well and helping, in particular, to boost the preparedness and achievement of children of color. At the same time, it will create jobs in disadvantaged communities and aid working parents who cannot afford child care.

Second, the act recognizes that different communities may require different types of investment in economic participation. It shores up tribal governments and reservation communities -- just as it aids struggling state governments -- with investments in reservation roads and bridges, public transit, housing improvement, tribal law enforcement, and efforts to end violence against women.

Third, and perhaps most significantly, the White House has explicitly directed federal agencies distributing ARRA funds to uphold established equal-opportunity, anti-discrimination, and labor protections. That's a marked departure from the Bush administration, which sought to waive those provisions in Gulf Coast rebuilding efforts after Hurricane Katrina.

This body of protections cuts across employment, housing, education, transportation, criminal justice, and environmental protection, and mandates that the benefits and burdens of federally funded projects be nondiscriminatory in practice as well as intent. It requires equal opportunity based on race, ethnicity, and, in some sectors, gender, religion, age, language ability, disability, and familial status. (Protections based on sexual orientation remain a gaping hole in existing equal-opportunity laws.)

Yet there is no certainty that the promise of an equitable recovery will be realized. Doing so requires transparency, coordination, and political will.

Watchdog groups have noted the lack of practical transparency surrounding stimulus spending. That is especially true regarding the information necessary to assess and ensure equal opportunity. Although the president promised in signing the ARRA that "the federal government will be held to new standards of transparency and accountability," spending decisions on the ground have proved very difficult for affected communities to track or participate in. The federal government's economic recovery Web site, Recovery.gov, contains some useful bits of information -- for example, the fact that $72 million has been allocated to improve public housing in Louisiana and $441 million disbursed by the Department of Transportation as of June. But it lacks the specificity, demographic, or geographic disaggregation necessary to assess the impact of ARRA investments on greater opportunity. State and municipal stimulus tracking sites vary widely in information and transparency, and few if any provide adequate data or analysis.

While the nation's equal-opportunity laws are well established, the infrastructure for monitoring and enforcing them is badly atrophied after a decade of neglect by the prior administration. And truly effective interagency coordination of those laws has been lacking since, at least, the Nixon administration. Experience shows that without monitoring, technical assistance, and rigorous enforcement, the opportunities and burdens created by ARRA projects will not be equitable. Rather, as we saw in the flawed rebuilding of the Gulf Coast, they are likely to deepen existing patterns of inequality. In doing so, they will fail to achieve the robust and lasting economic recovery that is ARRA's chief goal.

Finally, equitable implementation will require mustering significant public and political will. Contemporary barriers to equal opportunity are not well understood by the public, and few states or municipalities have a robust system for addressing them. Entrenched special interests and political influence may overtake fairness in funding decisions. And investment targeted toward disadvantaged communities may draw conservative backlash.

Despite these challenges, there are a range of things that the president, Congress, state and local officials, and civil society can do to promote a widely shared economic recovery.

The president should immediately integrate equal-opportunity monitoring and coordinated enforcement measures into the administration's stimulus implementation. An interagency task force could establish a protocol for collecting data on the distribution of funds by geography, race, gender, and other demographics, monitor projects on the ground, and provide technical assistance to federal-fund recipients to encourage their compliance. Requiring Opportunity Impact Statements from funding applicants can help to quickly select among shovel-ready projects and incorporate public input.

The White House must also greatly improve Recovery.gov by providing more project-specific and demographic data, as well as information on the equity measures attached to approved projects. And the president must use the bully pulpit, as he did so eloquently during the campaign, to explain to Americans why equal opportunity is crucial to our shared prosperity.

Congress should provide rigorous oversight of stimulus spending as it relates to equal opportunity and require regular reporting by the White House. It should also close gaps in existing law by prohibiting employment discrimination based on sexual orientation and restoring individuals' ability to challenge discriminatory policies in court.

State, municipal, and tribal governments should adopt public equal-opportunity policies, detailing how they'll ensure equitable benefits and burdens from stimulus-funded projects. They should seek public input on spending decisions, engage community groups in implementation, and report their impact, including the facts and data behind them.

Nonprofit organizations also have an important role to play in monitoring stimulus spending, holding local governments accountable to equal-opportunity standards, providing job training and other support services, and helping to shape projects that can expand opportunity for all.

In order to be successful, the American Recovery and Reinvestment Act must not only stimulate the economy but also instigate a new era of opportunity. While the law itself provides an important starting point, the hard part lies ahead.

About the Author

Alan Jenkins is the executive director of The Opportunity Agenda, a communications, research, and advocacy organization with the mission of building the national will to expand opportunity in America.